2G + 3G Spectrum Pattern + Likely Pricing for 3G
If you are a regular reader of this blog, then you are already aware of our coverage on 2G spectrum allocation.However, it is important to note the frequency bands in which Indian Telcos operate.
- CDMA – 824-844 and 869-889 MHz
- GSM – 890-915 and 935-960 MHz
- CDMA / GSM – 1710-1785 and 1805-1880 MHz
Now as far as 3G is concerned, India has offered the same frequency as Singapore, Korea, Malaysia, etc at 2100 MHz and is fairly in line with the rest of the world.[Very essential to make a business case for Telcos as it becomes easier to deploy the networks]
- 3G – 1920-1980 and 2110-2170 MHz
Pricing: The consensus estimates by various analysts is that the all India pricing for 3G spectrum is likely to be $1 bn or ~ Rs 5,000 crore [Excludes Rajasthan and North East] This may change if we see foreign Telcos throw their hat in the ring and will be known only when the list of bidders is announced in Jan 6th, 2009. Indian 3G spectrum is likely to be the most expensive in Asia and Australia.
Additionally, Government has said that foreign 3G entrants will get 2G spctrum. It would be unfair to rely on Government headd by IT Ministr like A. Raja who will twist and turn policies according to his will 
Political SMS Spam – File a Complaint
I read about the SMS spam created by the leaders of our nation including the ruling Congress Government in Delhi, during the recent Assembly elections. It is estimated that 60 mn cell phone users were spammed with 120mn SMS messages.
One97 communications said that they scrubbed the list against the NDNC Registry and spammed only to those who were not registered. One97 worked with leading political parties and has sent 50 mn messages.
Some think that Bulk SMS providers aren’t under the ambit of UCC. No this is not true, technically they are covered by the UCC and if you think you are registered with Do Not Call registry and still spammed, here is how you can file the complaint.
- Open the Spam SMS sent by the political party say – XYZ
- You won’t see any mobile number because it is masked by the sender id [XYZ]. However, Bulk SMS service providers are required to maintain a list of Sender Ids [ XYZ ] they allot to various entities.
- You need to locate the Number from where the message was relayed. Here are the instructions to get that Number on a Nokia Handset. Open the SMS message – Options – Message Details – Scroll Down – Look for Message Centre, where you get the number.
- Use this Number, Sender id, Date and Time of the SMS to file a complaint.
It is high time that our Politicians induce self-discpline before governing the nation.
3G + WiMax Spectrum Auction – Guidelines + Insight
Finally, I was able to go through the 136 page document. I am very excited about this auction as 3G marks the beginning of Telecom 3.0 in India 
[Sam Pitroda was Telecom 1.0 and current 2G is Telecom 2.0] DoT has stated its goal is to maximize revenue proceeds from the Auctions in a timely and transparent manner with efficient use of spectrum and avoid hoarding. [Hopefully, they'll be transparent in the entire process]
Bid Eligibility: So finally DoT had its way over TRAI in letting Foreign Telcos with experience to bid in the 3G + WiMax BWA auction. However, Foreign Telcos are subject to the 74% FDI in Indian Telecom and have to establish an Indian subsidiary with a local partner after the auction and apply for a UAS / CMTC license. Incumbents as well as new licensees holding UAS / CMTS are eligible to bid without any experience clause. For Wimax Spectrum bids, entity could be a Category “A” or Category “B” ISP or furnish an undertaking to obtain a UAS / CMTS license. A clear picture of bidders will unfold around the 10th of Jan’09 when qualified bidders list will be published.
Service Obligations: Winning bidders will be granted the license for a period of 20 years. They additionally have to fulfill service obligations – cover at least at least 50% of the District Headquarter area, out of which at least 15% of the DHQs should be rural Short Distance Charging Areas within a period of 5 years from the date of allotment of spectrum
Mergers & Acquisition: The document states,
The market share of the merged entity in the relevant service area shall not be greater than 40% either in terms of subscriber base separately for wireless as well as wireline subscriber base or in terms of Adjusted Gross Revenue.
Infrastructure Sharing: Passive infrastructure sharing, already in practice and shall be permitted. Active Infrastructure sharing excluding the spectrum will be permitted and essential amendments will be made shortly.
Auction Bid Participation and Process: Telcos are required to submit 25% of the reserved price in each circle for 3G + WiMax spectrum as bank guarantee. List of qualified bidders, ownership data etc will be made public before the commencement of auction. At the end of the final Clock Round, the following information will be provided to Bidders,
the Winning Prices; the Winning Bids made by that Bidder (if any); the number of unsold lots in each service area (i.e. the number of lots available less the total number of Winning Bids in each service area).
Winning Bidders will pay the sum of the relevant Winning Prices set in the Clock Stage plus their Winning Bids in the Assignment Stage. In the event of a tied outcome with more than one assignment producing the same total value of Winning Bids, the tie will be broken by selecting one of the tied outcomes at random. [ Why not go for an auction between the two ? ]
For 3G, the document mentions high speed data transfer speeds of at least 144 kbps. It would have been nice, had they made it at least 256 kbps in accordance with the definition of broadband in India. Stay tuned for regular updates. Working right away on getting information on which way the Telcos will bid. You are welcome to post your comments and thoughts.
3G + BWA Auction – Spectrum Availability
The DoT has announced the time line for the auction of 3G Spectrum and BWA Spectrum. Earlier it was reported that BWA Auction would happen first. However, DoT is now auctioning the 3G spectrum first and BWA later. As proposed earlier, BSNL / MTNL have got a backdoor entry in all circles for both 3G and BWA spectrum and hence we exclude their reference in the rest of this article. Each operator is eligible for only one block in 3G and BWA [DoT will pre-scan applicants and qualify them for the bidding process] Hopefully, they will make the list of eligible participants public so that we can identify dummy companies like Swan once upon a time backed by RCom.
3G Spectrum Auction: 2×5MHz comprises a block in 2.1 GHz. The proposed date of auction is 16th Jan-2009.
- Expect intense bidding in Delhi and Gujarat Circles as only 2 blocks are available for auction.
- West Bengal excluding Kolkata has only 1 block available for auction.
- Mumbai, Kolkata, Karnataka, Mahrashtra, Andhra Pradesh, Tamil Nadu, Kerala, Punjab, Haryana, UP(E), MP, Bihar, Orissa, Assam and Jammu & Kashmir have 4 spectrum blocks to be auctioned.
- UP(E) and Himachal Pradesh have 3 spectrum blocks, while Rajasthan and North East have None.
- Reserved bid amount is as published earlier.
BWA Spctrum Auction: 3 Blocks of 20 MHz available for auction across India in 2.3 GHz and 2.5 GHz. Proposd Date of Auction is 2 days from the day of close of 3G Auction.
While I fetch the final guidelines on the 3G + BWA auction, you can go ahead and make a guess on what the prices of winning bid are likely to be in Delhi, Mumbai, Kolkata, Gujarat, Mahrashtra, Karnataka, Tamil Nadu [includes Chennai for 3G+ BWA auction] and Andhra Pradesh.
RCom looking for Investors + GSM Launch on 28th ?
If you recall my post on DoCoMo buying stake in Tata Teleservices at a super premium, I had ended the post by saying,
Shall we now expect Anil Ambani to strike a deal at higher valuations
And ET is reporting today that RCom is looking for a strategic investor to pump funds to the tune of $4bn [Assuming Ambani succeeds in selling RCom at twice the valuation of Tata Teleservices, RCom's curent stock price doesn't justify this ]giving them a stake of slightly less than 20% in order not to trigger the open offer clause. RCom and BSNL are the only telcos in the India without a foreign investor. However, we expect the prospective investor will demand for transparency in RCom’s operations, accounting and audit practices which are under fire from vaarious sources, already.
So what will RCom do with all the cash ? [ Assuming someone will BUY Anil Ambani's Telecom Saga ]
The company is rumored to Buy-back its FCCBs which are quoted at a discount. However, Mint analysts say that this is a big hype and premature for the stock to rally. RCom needs big pile of cash for its ambitious GSM expansion as well as WiMax and 3G auction apart from the ongoing CAPEX in other verticals.
We have reliably learnt that Reliance GSM / SMART will be launched in major Indian cities across India on the 28th of DEC, coinciding the birth anniversary of Late Shri. Dhirubhai Ambani [The Polyester Prince]
With Reliance Infratel IPO taking a backsteat due to the current state of Equity markets, Anil Ambani has no choice but to knock the doors of PE and VC funds.
Restrict 3G Licenses to Existing Operators – TRAI
TRAI in its recommendations released just a while ago is of the view that 3G Spectrum Licenses be restricted to existing Telecom Players – UASL / CMTS licensees. These recommendations come at a critical time as the Spctrum Auction schedule is already announced. DoT is of the view that 3G licenses could be awarded to
new prospective service providers should have minimum one year experience in Telecom Sector in India or abroad of 8 providing at least 5 lakhs (500000) wireless access lines (2G, 3G services).
TRAI is of the view that DoT’s view doesn’t consider service providers who have been granted UAS license recently. [Unitech, Videocon Datacom, Swan, Loop etc] Anyway,they turned out to be speculators.
Why TRAI is against permitting non-existing players to be allowed at 3G auction ?
TRAI is of the view that the bidder may not have 2G UASL license and hence may bid for higher in 3G auction which will result in,
- High tariffs for 3G services
- Deprive existing operators from providing 3G services
and finally adds,
The Authority firmly believes that in the interest of the growth of the Indian telecom sector, entry of this kind must be strongly discouraged.
TRAI’s recommendations also include,
- The spectrum module for auction should be 2X5 MHz.
- The total availability of spectrum should be made public at the stage of the auction so that the bidders are fully aware regarding the first and subsequent phase of allocation on the price determined by the auction.
- Further review to be taken after a period of 3 years
So the problem we have on hand is, if foreign Telcos without 2G licensee are prohibited from the auction, then spectrum auction may result in lesser revenues to the Government. And if they are permitted and if 3G services are costly [as assumed by TRAI], it is the question of affordability and acceptability by consumers.
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